Longtime Steely Dan producer Gary Katz recalled having to fire Don Henley after the Eagles member tried to track vocals for the band's 1977 hit "Peg," but it didn’t work out.

Both groups were managed by Irving Azoff and had become good friends, which added additional strain to the moment when Katz had to tell Henley his services weren’t required.

“In the chorus, the backgrounds are sort of the lead,” Katz tells UCR. “It wasn’t like a [usual] background part.” While the song was coming together, he and Donald Fagen discussed how they “both liked Henley’s singing. ‘Why don’t we call Henley and Linda Ronstadt? Maybe that would be cool and something different.’ So, I called Irving … Linda wasn’t feeling well, so Nicolette Larson came.”

The producer notes that Fagen "went out as he would with anyone [and sat] at the piano. He said, ‘This is how the part goes.’ We played the track on the speakers, and Fagen used the piano to teach each one of them their parts. He came in and they tried it – and it might as well have been me and you.” They tried a second time and got the same disappointing result. "There wasn’t patience as much as instant reaction of the realities of the moment,” Katz said. “We didn’t jerk people off by letting them think it was going to work and have them sit for two hours. When we knew it wasn’t going to be OK, Fagen would tell me to end it. So they sang it again, and it was no good.”

At that point, Fagen invited bandmate Walter Becker to “go get a sandwich,” and as the pair left the studio, Fagen told Katz: “Oh, fire them.” The instruction left him “with my finger up my ass having to fire Henley. Which I did – and have heard about for 35 years since, in various ways.”

Katz adds that "the last time I saw Henley, he sidled up to me … and he said, ‘Are you going to fire me again today, Katz?’ But he didn’t smile when he said that.”

He agrees it was “a difficult day at the office, because, like [Fagen and Becker], I was part of that inner-circle crowd. We were all in the same little area. We lived in the same place and had the same manager. It was always Eagles and Steely Dan for a long time in L.A.”

Listen to Steely Dan’s 'Peg'

Old friend Michael McDonald was brought in to complete “Peg” instead, which led Katz to recall the time Steely Dan first heard the onetime Doobie Brother sing as the result of a post-show conversation. “The band and the crew went to a bar and did whatever they did," Katz says. "Donald, Walter and I never went and did that. We would usually just go back to the hotel and get some food and play cosmic Scrabble – we’d smoke a few joints and play Scrabble.”

They were joined later by guitarist Denny Dias, who told them: “You know, I heard a white guy sound like Ray Charles!” Katz notes that Dias "was a reliable source of information. It turned out to be Michael.” So McDonald wound up recording “Bad Sneakers,” which the producer recalls as "pretty good." "Donald said, ‘All right, let’s double that.’ It sounded a little better. ‘OK, let’s triple it.’ It sounded even better than that. ‘All right, let’s put a fourth one on, and we’ll have stereo pairs.’ When he was finished with that, Donald put the talk-back on and he said, ‘You know, you sound like a thousand camels in Necochea.’”

Listen to Steely Dan’s ‘Bad Sneakers’

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